Last Updated: 4:05 PM EST
Discover the Best Stocks and Maximize Your Portfolio:
- See what stocks are receiving strong buy ratings from top-rated analysts.
- Filter, analyze, and streamline your search for investment opportunities with TipRanks’ Stock Screener.
Stock indices finished today’s trading session mixed after inflation came in hotter-than-expected. Indeed, the Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) fell 0.5% and 0.27%, respectively. Meanwhile, the Nasdaq 100 (NDX) gained 0.12%.
The U.S. Consumer Price Index (CPI) rose 0.5% in January, which not only exceeded expectations but also accelerated from December’s 0.4% increase. On a year-over-year basis, CPI came in higher than expected at 3%. Core CPI, which excludes food and energy, climbed 0.4% month-over-month and 3.3% year-over-year in January to top expectations as well.
The January CPI data shows that inflation has moved farther away from the Federal Reserve’s 2% goal. In fact, the index for shelter increased 0.4% month-over-month, accounting for almost 30% of the headline CPI increase. Energy and food prices also rose, with the energy index increasing 1.1% and the food index climbing 0.4%. Furthermore, the index for used cars and auto insurance ticked up, which indicates that inflation remains sticky in certain areas.
This stubborn inflation will likely make the Fed more reluctant to cut rates, according to economists. Indeed, Bill Adams, chief economist at Comerica, said the Fed will see January’s hot inflation print as confirmation that price pressures continue to bubble beneath the economy’s surface. Separately, David Russell, global head of Market Strategy at TradeStation, warned that time is running out on the bull market if inflation isn’t tamed soon.
However, Adams did note one positive trend: rent and home buying price increases continue to cool, with the year-over-year increase of rent of primary residence being the lowest since February 2022.
First Published: 3:32 AM EST
U.S. futures were near the flatline on Wednesday morning as investors awaited the release of the latest Consumer Price Index (CPI) data. This key inflation report will provide valuable insights into the Federal Reserve’s future monetary policy. Futures on the Dow Jones Industrial Average (DJIA) and the S&P 500 (SPX) were down 0.04% and 0.03%, respectively, at 3:25 a.m. EST, February 12, while the Nasdaq 100 (NDX) futures were up 0.05%.
On Tuesday, major indices witnessed a mixed performance. The Dow Jones edged up 0.3%, while the S&P 500 remained unchanged. However, the Nasdaq Composite (NDAQ) dipped 0.4%.
Market sentiment was impacted by concerns over rising trade tensions. Recent tariffs imposed by the Trump administration on steel and aluminum imports raised concerns about the potential impact on inflation and economic growth.
It must be noted that Federal Reserve Chair Jerome Powell emphasized a cautious stance on monetary policy during his testimony before the Senate Banking Committee. He stated that the Fed will maintain the current interest rates, citing persistent inflation and the need to assess the impact of previous rate hikes.
The focus now shifts to January’s CPI report. Currently, economists anticipate headline inflation to have grown 0.3% month-over-month and 2.9% year-over-year. Also, investors will be closely watching Powell’s testimony before the House Committee on Financial Services for further guidance on the central bank’s monetary policy outlook.
In today’s earnings calendar, several companies such as CVS Health (CVS), Biogen (BIIB), Robinhood (HOOD), Cisco Systems (CSCO), Trade Desk (TTD), and MGM Resorts (MGM), are scheduled to release their quarterly results.
Meanwhile, the U.S. 10-year treasury yield was up, floating near 4.55% as of writing. Simultaneously, WTI crude oil futures are trending lower, hovering near $72.82 per barrel as of the last check.
Elsewhere, European indices opened higher on Wednesday as investors looked forward to a key U.S. inflation report, due today.
Asia-Pacific Markets Traded Higher on Wednesday
Asia-Pacific indices were in the green today. Ongoing optimism about artificial intelligence (AI), fueled by the breakthrough of Chinese startup DeepSeek, supported gains in Chinese stocks. Further, Japanese stocks rose thanks to strong earnings reports.
Notably, the Hang Seng Index closed higher by 2.65%. Further, China’s Shanghai Composite and Shenzhen Component indices gained 0.85% and 1.43%, respectively. Also, Japan’s Nikkei and Topix indices were up 0.42% and 0.01%, respectively.
Interested in more economic insights? Tune in to our LIVE webinar.
